Insiders see Sharp, Foxconn talks going nowhere

Home > Business > Economy

print dictionary print

Insiders see Sharp, Foxconn talks going nowhere

Sharp’s talks with Taiwan’s Foxconn Technology Group over an investment in the Japanese electronics maker will probably end March 26 without an agreement, two persons familiar with the discussions said yesterday.

Negotiations haven’t led to a deal partly because the companies can’t agree on a price after Sharp’s shares declined, said one of the persons, both of whom asked not to be named. Shares of the Aquos television maker had their biggest one-day decline in two months yesterday, the biggest decline among companies in the Tokyo Stock Exchange’s first section.

Stumbling blocks in the talks also include management control and company strategy, one person said. Japan’s largest maker of liquid-crystal displays said in November that talks might continue beyond March. Sharp is trying to raise funds as it forecasts a record full-year loss of 450 billion yen ($4.8 billion) amid slow demand for its panels and TVs.

Foxconn, founded by billionaire Terry Gou, initially agreed in March to buy a 9.9 percent stake in Osaka-based Sharp for 550 yen a share. The deal foundered as Sharp’s shares plunged for seven straight months, reaching as low as 143 yen, and as Foxconn said it would renegotiate the price.

The Mainichi newspaper reported Feb. 23 Saturday that Sharp might suspend the share-sale talks, without saying where it got the information. The Sankei newspaper said the electronics maker is considering measures including a public share sale to raise about 200 billion yen.

Miyuki Nakayama, a Tokyo-based Sharp spokeswoman, said the company wasn’t the source of either report and no decision has been made on ending negotiations with Foxconn or selling shares.

“Discussions are ongoing,” said Louis Woo, a spokesman for Taipei-based Foxconn. “We are not bound by any timetable.”

Hon Hai Chief Financial Officer Huang Chiu-lian said in June that the company’s plans to take a stake in Sharp faced resistance from management and board members of the Japanese company. Sharp’s managers “fear the company becoming a part of Hon Hai,” Huang said at the time.

Discussions over other types of cooperation and the possible sales of Sharp factories to the Taiwanese company may continue, the two people familiar with the talks said. Sharp sold a stake in an LCD factory in Sakai, central Japan, to Foxconn’s Gou in July.

Sharp is in talks with other companies on possible share sales and aims to include a deal in its medium-term business plan, which may be disclosed next month, one person said.

The TV-maker agreed in December to sell as much as 9.9 billion yen of new shares to San Diego-based Qualcomm. The U.S. chipmaker has so far bought 4.9 billion yen as part of the two-step transaction.

Sharp shares plunged 55 percent to 303 yen last year amid widening loss forecasts. The company has reduced its workforce, sold assets and mortgaged its headquarters to refinance debt after posting a record 376 billion-yen net loss in the fiscal year ended March 31. The shares have gained 2.3 percent this year. Bloomberg

More in Economy

Average selling price of Seoul apartments hits 1 billion won

New legislation on online shopping proposed by FTC

Cash is truly king in time of coronavirus

When settling for a studio apartment is too expensive

Bill creates new rental protections for small businesses

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now